Ulta stock rallied Friday after the cosmetics and beauty brand posted a Q4 beat late Thursday. Meanwhile, Peloton shares pedaled higher following a reversal in analyst sentiment.
While many industries are awash in uncertainty, Ulta Beauty expects fiscal 2025 to be a "pivotal year," as the company looks to optimize its business and invest in future growth.
The beauty salon and supplies chain reported a 4.7% increase in fourth-quarter earnings, to $8.46 per share. Net sales declined 1.9% to $3.49 billion.
FactSet analysts expected earnings of $7.13 per share on $3.46 billion in revenue.
Comparable sales rose 1.5%, slowing from 2.5% growth last year.
CEO Kecia Steelman in the Q4 release also said that "while it will take time to see the impact of (the company's 2025) efforts, we are confident these investments will help reignite our momentum and unlock sustained growth."
Ulta Beauty Outlook
Ulta Beauty expects 2025 earnings to range from $22.50 to $22.90 per share on $11.5 billion to $11.6 billion in sales. The guidance came in below analyst views for earnings of $23.06 per share on $11.6 billion in sales.
Ulta sees comparable sales growth to be flat or tick up 1%.
Barclays lowered its price target on ULTA stock to 327 from 445 on the results, The Fly reported. The firm noted the guidance came in below consensus amid an uncertain macroeconomic backdrop. Meanwhile, 2024 marked the first fiscal year that Ulta Beauty has lost market share within the beauty category, as competition accelerates at physical stores and online. Barclays kept an Equal Weight rating on the shares.
JPMorgan after results said that Ulta is "setting up as a port in the retail storm," based on stable-to-improving momentum into 2025 with flattish quarter-to-date trends. The firm expects investors to buy in on the guidance cut as Ulta continues to gain traction on market share performance. JPMorgan lowered its price target on ULTA stock by 5 to 475 and kept an Overweight rating on shares.
Peloton
Elsewhere, Canaccord on Friday upgraded Peloton stock to buy from hold, noting that it sees a "turning point" for the exercise equipment and subscription company. Peloton is a clear leader in the connected fitness industry, the firm wrote in a note reported by The Fly. The company has around 6 million members and a high-margin recurring revenue stream. Canaccord expects Peloton's revenue to inflect in fiscal 2026 from new revenue initiatives, followed by subscription growth in 2027 from the product additions.
Peloton is "at the turning point in its journey where there is meaningful upside potential from current levels," Canacocord wrote. The firm maintained its 10 price target on the shares.
Ulta Stock, Peloton
ULTA stock rallied about 13.7% Friday to push above its 21-day exponential moving average. Shares are down nearly 18% in 2025.
Rival Estee Lauder rose 2.6% Friday. EL stock is down 11.3% this year.
Peloton jumped 16.1% Friday to rebound above its 200-day moving average and close in on its 21-day line. Still, shares have tumbled about 19% so far this year.
You can follow Harrison Miller for more stock news and updates on X/Twitter @IBD_Harrison
